Lufthansa upbeat despite drop in profit
October 25, 2017
Between July and September — the key summer holiday period for European carriers — Lufthansa's net profit had fallen by 17 percent year-on-year to 1.18 billion euros ($1.4 billion), the German flagship carrier announced Wednesday.
The decline was largely due to an accounting effect, the airline said in a statement, after bottom-line profit had been boosted by the elimination of provisions following a pay and pensions deal with staff. Underlying or operating profit increased by 32 percent to 1.52 billion euros, on the back of an 11-percent increase in revenues to 9.81 billion euros.
Lufthansa CEO Carsten Spohr said the result "gives us the investment and growth capabilities we need to play an active part in the consolidation of the European airline market, and to continue to invest in the future of our company."
The German airline group is currently on a course of rapid expansion after snapping up 80 aircraft belonging to bankrupt former competitor Air Berlin.
The purchase was part of a 1.5-billion-euro investment in Eurowings, said Chief Financial Officer Ulrik Svensson, which aimed to create 3,000 new jobs at Lufthansa's low-cost division. The deal would however not be completed before January next year. Germany's main carrier has also made an offer recently to take over some European routes belonging to Italy's Alitalia.
Therefore, Lufthansa is optimistic about its future, confirming on Wednesday its forecast for an increase in operating profit from the 1.75 billion euros reported in 2016. It expects unit revenue to rise slightly in the fourth quarter after a 4.5 percent increase in the third quarter. It previously predicted a drop in unit revenue for the second half.
uhe/nz (Reuters, AFP)